AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT ("Agreement"), is entered into as of March 13, 2013, between AEROCENTURY CORP., a Delaware corporation ("Borrower"), UNION BANK, N.A., together with any other Lender hereunder from time to time (collectively, the "Lenders" and individually, a "Lender") and UNION BANK, N.A., as Agent ("Agent"), effective as of the Closing Date, with reference to the following facts:
A. Borrower is in the business of purchasing and leasing aircraft and aircraft engines and equipment. Borrower, each of the financial institutions as a lender party thereto (collectively, the “Original Lenders”) and Union Bank, as administrative agent for the Original Lenders, are parties to that certain Loan and Security Agreement dated as of April 28, 2010 (the “Original Loan and Security Agreement”). Pursuant to the Original Loan and Security Agreement, Original Lenders made a revolving credit facility available to Borrower, to be used for the purpose of refinancing existing revolving debt, acquiring aircraft and aircraft engines, and supporting Borrower's working capital needs and general corporate purposes.
B. Borrower has requested that Lenders provide Borrower with an amended revolving line of credit in an amount equal to the Revolving Commitment to be used by Borrower for among other things, refinancing the loans outstanding under the Original Loan and Security Agreement, acquiring aircraft and aircraft engines owned and held for lease, and supporting Borrower’s working capital needs and general corporate purposes.
C. Lenders are willing to extend such a revolving line of credit to Borrower, subject to the terms and conditions set forth herein.
D. Borrower has requested and the parties hereto agree that the Original Loan and Security Agreement shall be amended and restated in its entirety as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:
DEFINITIONS AND ACCOUNTING TERMS
1.1 Defined Terms
. As used in this Agreement, the following terms shall have the respective meanings set forth below:
"Account Debtor" means any Person who is obligated under an Account.
"Accounts" means all "accounts," as such term is defined in the UCC, now owned or hereafter acquired by Borrower, including (a) all accounts receivable, payments and pre-payments under Leases, other receivables, book debts and other forms of obligations (other than forms of obligations evidenced by chattel paper, documents or instruments), whether arising out of goods sold or services rendered by it or from any other transaction (including any such obligations that may be characterized as an account or contract right under the UCC), (b) all purchase orders or receipts for goods or services, (c) all rights to any goods represented by any of the foregoing (including unpaid sellers' rights of rescission, reclamation and stoppage in transit and rights to returned, reclaimed or repossessed goods), (d) all monies due or to become due to Borrower under all purchase orders and contracts for the sale of goods or the performance of services or both by Borrower or in connection with any other transaction (whether or not yet earned by performance on the part of Borrower) now or hereafter in existence, including the right to receive the proceeds of said purchase orders and contracts, and (e) all collateral security and guaranties of any kind, now or hereafter in existence, given by any Person with respect to any of the foregoing.
"Acquisition" means any transaction, or any series of related transactions, consummated after the Closing Date, by which Borrower and/or any of its Subsidiaries directly or indirectly (a) acquires any ongoing business or all or substantially all of the assets of any Person engaged in any ongoing business, whether through purchase of assets, merger or otherwise, (b) acquires control of securities of a Person engaged in an ongoing business representing more than 50% of the ordinary voting power for the election of directors or other governing position if the business affairs of such Person are managed by a board of directors or other governing body or (c) acquires control of more than 50% of the ownership interest in any partnership, joint venture, limited liability company, business trust or other Person engaged in an ongoing business that is not managed by a board of directors or other governing body.
“Advance Rate” means:
(a) seventy-five percent (75%) of the Appraised Value of Bombardier Aircraft and ATR Aircraft, provided, however, that the rate for such Bombardier Aircraft and ATR Aircraft which are not subject to an Eligible Lease for more than two hundred seventy (270) days will be reduced to forty percent (40%);
(b) seventy percent (70%) of the Appraised Value of Leased Spare Engines, provided, however, that the rate for such Leased Spare Engines which are not subject to an Eligible Lease for more than one hundred eighty (180) days shall be reduced to thirty-five percent (35%);
(c) sixty-five percent (65%) of the Net Book Value for Saab 340B Plus Aircraft, provided, however, that the rate for such Saab manufactured Aircraft which are not subject to an Eligible Lease for more than one hundred eighty (180) days shall be reduced to zero percent (0%);
(d) sixty percent (60%) of the Net Book Value of all Other Saab Aircraft, provided, however, that the rate for such Other Saab Aircraft which are not subject to an Eligible Lease for more than one hundred eighty (180) days shall be reduced to zero percent (0%);
(e) fifty percent (50%) of the Appraised Value of Fokker 50 Aircraft, provided, however, that the rate for such Fokker 50 Aircraft which are not subject to an Eligible Lease for more than one hundred eighty (180) days shall be reduced to zero percent (0%); and
(f) forty percent (40%) of the Appraised Value of Fokker 100 Aircraft, provided, however, that the rate for such Fokker 100 Aircraft which are not subject to an Eligible Lease for any period of time shall be reduced to zero percent (0%).
"Affiliate" means, with respect to any Person, another Person that, directly or indirectly, Controls, or is Controlled by or is under common Control with such other Person. For the purpose of this definition, "Control" or "Controlled" means the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of voting securities, by contract or otherwise.
"Agent" means Union Bank, N.A. when acting in its capacity as Agent under any of the Loan Documents, or any successor Agent.
"Agreement" means this Amended and Restated Loan and Security Agreement, as the same may, from time to time, be amended, supplemented, modified or restated.
"Aircraft" means each aircraft purchased by Borrower described in a Mortgage, together with any and all Parts (including Engines) which are either incorporated or installed in or attached to such aircraft’s airframe or required to be subject to the lien and security interest of such Mortgage.
"Alternative Dispute Resolution Agreement" means the Alternative Dispute Resolution Agreement of even date herewith among Agent, each Lender, and Borrower.
"Applicable Base Rate" means the percentage as calculated in Section 2.2.1(a).
"Applicable Base Rate Margin" means two and three quarters of one percent (2.75%).
"Applicable Law" means, in respect of any Person, all provisions of constitutions, statutes, rules, regulations and orders of governmental bodies or regulatory agencies applicable to such Person, and all orders and decrees of all courts and arbitrators in proceedings or actions to which the Person in question is a party or by which it or its properties are bound.
"Applicable LIBOR Margin" means three and three quarters of one percent (3.75%).
"Applicable LIBOR Rate" means the percentage as calculated in Section 2.2.1(b).
"Applicable Unused Line Fee Percentage" means one half of one percent (0.50%).
"Appraisal" means a "desktop appraisal" (i.e., an appraisal without a physical inspection of such Equipment), or, if a Default exists, such other type of appraisal (e.g., extended desktop, visual inspection) as shall be required by Agent, of an item of Equipment to determine the Appraised Value of such Equipment, performed by an Appraiser retained by Agent on behalf of the Lenders.
"Appraised Value" means, with respect to an item of Equipment, an amount as determined by the Appraiser to be the fair market value as set forth in the most recent Appraisal pursuant to Section 8.1.6 or, with respect to an item of Equipment being added to the Borrowing Base after submission of an annual Appraisal, an individual Appraisal of such item of Equipment.
"Appraiser" means (i) ASCEND – Flight Global Advisory Service, (ii) any other independent appraiser that is a member of the International Society of Transport Aircraft Trading ("ISTAT") and is acceptable to Agent or, (iii) if ISTAT ceases to exist, any similar professional aircraft appraiser organization that is acceptable to Agent.
"APU" means, whether or not installed on an airframe, the auxiliary power unit of the manufacture and model described in any Mortgage, together with any and all modules and Parts which are either incorporated or installed from time to time in or attached to such APU.
"Assets" means all of Borrower's assets and property, whether now existing or owned or hereafter created or acquired, and wherever located, including, but not limited to:
(a) all accounts, chattel paper (including tangible and electronic chattel paper), contract rights, deposit accounts, documents (including negotiable documents), equipment (including the Equipment and all accessions and additions thereto, including at any time all Propellers, APUs and Landing Gear, and all parts, components, equipment, instruments, appliances, avionics, radio and radar devices, cargo handling systems and loose equipment that are at such time incorporated or installed in or attached thereto or to an Aircraft or Engine), general intangibles (including payment intangibles and software), goods (including fixtures), instruments (including promissory notes), inventory (including all goods held for sale or lease or to be furnished under a contract of service, and including returns and repossessions), investment property (including securities and securities entitlements), leases, letter of credit rights, money, and all of Borrower's books and records with respect to any of the foregoing, and the computers and equipment containing said books and records;
(b) all common law and statutory copyrights and copyright registrations, applications for registration, now existing or hereafter arising, in the United States of America or in any foreign jurisdiction, obtained or to be obtained on or in connection with any of the forgoing, or any parts thereof or any underlying or component elements of any of the forgoing, together with the right to copyright and all rights to renew or extend such copyrights and the right (but not the obligation) of Agent to sue in its own name and/or in the name of the Borrower for past, present and future infringements of copyright;
(c) all trademarks, service marks, trade names and service names and the goodwill associated therewith, together with the right to trademark and all rights to renew or extend such trademarks and the right (but not the obligation) of Agent to sue in its own name and/or in the name of the Borrower for past, present and future infringements of trademark;
(d) all (i) patents and patent applications filed in the United States Patent and Trademark Office or any similar office of any foreign jurisdiction, and interests under patent license agreements, including, without limitation, the inventions and improvements described and claimed therein, (ii) licenses pertaining to any patent whether Borrower is licensor or licensee, (iii) income, royalties, damages, payments, accounts and accounts receivable now or hereafter due and/or payable under and with respect thereto, including, without limitation, damages and payments for past, present or future infringements thereof, (iv) right (but not the obligation) to sue in the name of Borrower and/or in the name of Agent for past, present and future infringements thereof, (v) rights corresponding thereto throughout the world in all jurisdictions in which such patents have been issued or applied for, and (vi) reissues, divisions, continuations, renewals, extensions and continuations-in-part with respect to any of the foregoing; and
(e) any and all cash proceeds and/or noncash proceeds of any of the foregoing, including, without limitation, insurance proceeds, and all supporting obligations and the security therefor or for any right to payment. All terms above have the meanings given to them in the California Uniform Commercial Code, as amended or supplemented from time to time, including revised Division 9 of the Uniform Commercial Code-Secured Transactions, added by Stats. 1999, c.991 (S.B. 45), Section 35, operative July 1, 2001.
The following information was filed by Aerocentury Corp (ACY) on Thursday, March 14, 2013 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.